What is Classified Stock?
Classified stock is common stock that is issued in two types or categories. Each type of common stock will carry certain terms and conditions, including privileges extended to the holder of the stock. The use of a classified stock investment structure for a company can be a very attractive option that helps the corporation attract more than one type of investor. Sometimes considered a complex capital structure, classified stock is really a relatively easy strategy to implement and manage. The first type or category in a classified stock structure is the Class A stock. Generally, investors who hold Class A stock in a company enjoy a full range of rights and privileges associated with the shares. Often, these privileges will include voting privileges at various levels that are defined in the articles of incorporation for the company, as well as dividend opportunities that are superior to those associated with other types of classified stock. Class B stock is the other most common element
” Classified stock is common stock that is issued in two types or categories. Each type of common stock will carry certain terms and conditions, including privileges extended to the holder of the stock. The use of a classified stock investment structure for a company can be a very attractive option that helps the corporation attract more than one type of investor. Sometimes considered a complex capital structure, classified stock is really a relatively easy strategy to implement and manage. . The first type or category in a classified stock structure is the Class A stock.
